Charts and graphs are not things that people particularly enjoy. Nonetheless, if you are hoping to be a trader that makes logical and practical trades, then it is inevitable that you use them. While many a website will talk about the importance of these charts or advertise them, there is not much material regarding the charts themselves.
Rarely are all of the charts tackled in one block of information. This article discusses the binary options trading charts you need to understand. Here are the types that you need to be familiar with:
These are the most commonly discussed types of charts for binary options and in fact, most financial trading. In a nutshell, it describes the price movements experienced by a particular asset. One of the reasons that this chart is so popular is because it discloses a considerable amount of information.
It can tell you the opening price, the closing price, the highest value that the asset reached, and finally the lowest price for that period. The candlesticks are also plotted in different colors. This helps to determine whether that period was a positive or a negative one.
These charts can be used for a number of reasons. It is a good way to determine the entry and exit points for a particular asset and market. It can also be used to assess whether or not a trend is about to reverse its position.
Bar charts are also known as Open High Low Close charts. The Bar chart and the Candlestick chart actually share a great deal in common. In fact, they are both responsible for the displaying the same types of information. The only real discernible feature here is the manner in which the charts are plotted. It is for this reason alone that more people seem to prefer the Candlestick chart. Aesthetically speaking, it appears easier to read and understand.
Tick charts are what you need to use if you only want to see a small part of the price movements. This is because this chart can only show you what took place in the last few minutes. If you require anything earlier than that, this chart will not be useful to you. However, you will be able to see every change and movement of the price of the asset for those few minutes.
Line charts are similar to Tick charts except that they show you the price movements for a longer period of time. This is because the information depicted by the line charts is a condensation of several price movements.
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As a result, you are only really able to determine what the closing price of a certain aspect was. Although it is good for dealing with elongated periods of time, it doesn’t really offer the trader a lot of information. While it may be simple to read, it does have its limitations.
Know Which Chart to Use
Although charts are quite useful, not many people are too keen on using them. When they feel as though they must use them, they often opt for the easiest option – which is typically the Line chart. As mentioned, nonetheless, these are not adequate enough for you to make a reasonable deduction. Therefore, as uninteresting as it may seem, it is best to learn how to master the candlestick or bar chart. These charts are the ones that will come to your aid when you want to decide on a trade.
The above are the binary options trading charts that you need to understand. This now puts you in a better position to determine which one you need to use.